State and county officials and advocates of President Barack Obama's health care overhaul hope the effort will spur more small businesses to begin covering insurance costs for employees. Franchot's office estimates nearly 110,000 businesses in Maryland could be eligible, based on the number of employees and the amount of withholding.

"These small businesses deserve every break they can get in a sluggish recovery," Franchot, a Democrat, said at Howard Community College. "They have been hammered year after year, and they may just not know about the tax credit available to them under the Affordable Care Act."

He announced a pilot program targeting 5,000 Howard businesses, the number the tax rolls show might be eligible for the credit.

The credit, which has been available to businesses in Maryland since fall 2010, may be used to offset up to 35 percent of group health insurance costs. Franchot's office was not able to say Monday how many businesses have taken advantage of the credit so far.

The comptroller sent letters urging the Howard businesses to claim the credit if they have fewer than 25 full-time employees, pay average annual wages of less than $50,000 per employee and pay at least half of the employee-only premium.

The amount a business may claim depends on the number of employees and average wage. Starting in the 2014 tax year, businesses will be able to claim up to half of the premium expenses of coverage purchased through the Maryland Health Connection, the state's health insurance exchange marketplace, which is set to begin in October.

Jamal Lee said the credit, along with a state health care subsidy, has allowed him to offer health insurance to the six employees of his audio and lighting event production company in Laurel.

When Lee started his business in 2005, he said, he had no health insurance himself and would travel out of the United States for less expensive medical and dental care.

Lee said the ability to offer insurance to workers "increases our bottom line."

"It means greater morale," he said. "[Employees] know we care about them, and we get a better product. They can go to the doctor now."

Grant Lahmann of the advocacy group Small Business Majority said that for many small businesses "operating under the thinnest of margins, providing health care is out of reach."

For those businesses, he said, the tax credit is a key part of the health insurance overhaul. The law requires businesses with 50 or more employees to offer health insurance by Jan. 1, 2015.

Businesses with fewer than 50 workers are not required by law to offer insurance. That's where the tax incentives come in.

"It's a major boost to small businesses and levels the playing field to compete for employees with large businesses," Lahmann said.

If the campaign in Howard County prompts small business owners to apply for the credit, it could be replicated in other counties and states, advocate Vincent DeMarco said. DeMarco's Maryland Health Care for All! Coalition is working with the comptroller's office on the campaign.

"Why Howard County? We wanted to test it," DeMarco said.

The county has some 18,000 residents who have no health insurance, the county's health officer said.

"That is unacceptable," Maura Rossman said. "This is an opportunity for small businesses and individuals to become insured and have access to quality health care."

Franchot said he hopes the mailing will encourage business owners to take advantage of the credit.

"It is not a small amount of money," he said. "If you are too busy, get an accountant or tax lawyer."

Businesses may still claim the credit for the 2012, 2011 and 2010 tax years. A tax credit calculator is available at http://www.smallbusinesstaxcredits.org. Additional information is at the comptroller's website, http://www.marylandtaxes.com.

Rep. Elijah E. Cummings, also at the event, said small businesses play a key role in the state's economy.

"Unless our employee are healthy," the Baltimore Democrat said, "things will not work properly."

State auditors say Maryland's health department did not follow proper procedure when it hired a contractor to replace the system used to process Medicaid payments. The department later had to suspend work with the company.

Health advocates across the state have begun the final push to enroll citizens in insurance plans under health care reform, enticing them with a star Orioles player, extended hours and late-night breakfast at Denny's.

Residents of Maryland who bought insurance through the Maryland health exchange should expect letters in the mail this week proving they held coverage in 2014, the first year that federal tax penalties apply under the Affordable Care Act.